Business News of 2014-05-09

Bankswitch wants more cash from GOG

Barely a month after winning a whopping GHC197,401,872m ($88m) judgment from the Permanent Court of Arbitration in a case of wrongful abrogation of contract, Bankswitch Ghana is pushing the government of Ghana for some additional payments which are expected to increase government’s overall liability to the company. The supplementary payments or add-on’s, which are said to be part of the terms of the judgment delivered by the Hague based court on April 11, 2014, would add GHC34,545,327.95m to the original award thus bringing government’s total debt to GHC231, 947,201.95m ($110m), the Center for Investigative Reporting Ghana (CIRGHA)can reveal. The additional GHC34,545,327.95m been sought by the company are meant to cover VAT and NHIL payments which per the directives of the court are to be calculated on the award and paid to Bankswitch Ghana by the government of Ghana, CIRGHA can further reveal. In a letter fired to the Attorney-General and Minister for Justice by its lawyers, Bentsi-Enchill, Letsa and Ankomah, BG is also insisting that interests be calculated on the award from “12th April, 2014 until the date of final payment, as well as VAT and NHIL on any interest accrued…”, a situation which would see a further spike in government’s liability to the company. “Furthermore, interest, calculated at the annual average interest rate of all Ghanaian commercial banks (see paragraph 11.207 of the Award) is payable on the Award from the 12th April, 2014 until date of final payment, as well as VAT and NHIL on any interest accrued.” The letter, which was sighted by CIRGHA, was copied to the Chief of Staff- Office of the President, the Minister of Finance, Ministry of Finance and Economic Planning, the Accountant-General, Accountant-General’s Department, the Executive Secretary, Revenue Agencies and Governing Board and the Commissioner-General, Ghana Revenue Authority. In its ruling earlier this month, the PCA upheld claims by Bankswitch Ghana that its contract to manage the GCSDMS was wrongfully abrogated by the government of Ghana and subsequently awarded Bankswitch Ghana one of the largest settlements in the history of the court to compensate for their loss.
Until 2012 Bankswitch Ghana was the lead agency in the implementation of Ghana’s first fully integrated electronic platform employed in the processing of imports at the ports.
However the issue of the legality of the contract awarded to Bankswitch Ghana is currently before the Supreme Court of Ghana. In a suit brought against a consortium of companies led by Bankswitch Ghana, Dr. Clement Apaak who is adamant that Bankswitch is entitled to any such claim is praying the Supreme Court of Ghana to declare the purported contract null and void on the basis that it (contract) lacked parliamentary approval pursuant to Article 181 (5) of the 1992 Constitution. In his writ, the Presidential Staffer is also seeking an order requiring the 2nd and 3rd defendants namely (Bankswitch Ghana and GET Group) to indemnify the Government of Ghana against any loss, claims, arbitral awards, costs and/or any other liability whatsoever that the Government may be exposed to by reason of any person, institution and/or body relying on or giving effect to the provision of the said illegal Agreements. “A declaration that the agreement dated the 12th day of December, 2007 and entered into between the Government of Ghana acting through the Ministry of Finance and Economic Planning and Revenue Agencies Governing Board on the one part, and the 2nd and 3rd Defendants on the other part, is an international business or economic transaction, and thus null and void for want of Parliamentary authorization pursuant to 181 (5) of the 1992 Constitution.” Article 185 (5) of the 1992 Constitution states: “This article shall, with the necessary modifications by Parliament, apply to an International business or economic transactions to which the Government is a party as it applies to a loan.” The companies in the Bankswitch Ghana consortium include Get Holdings, (a company incorporated under the laws of Cyprus), Get Technologies, (a company incorporated under the laws of Cyprus), Get Group, (a free zones enterprise registered in Dubai, UAE), Faberkner Corporation, (a company established under the laws of Panama) and Intertek International Limited, (a company organized and existing in accordance with the laws of England and Wales).
We produce a copy of the letter for your perusal. The Attorney-General and Minister for Justice Attorney-General’s Department Ministries Accra Dear Madam, RE: BANKSWITCH GHANA LIMITED V. THE REPUBLIC OF GHANA (PCA CASE NO. 2011-10) The above-titled matter refers. As you are aware, on 11th April, the Arbitral Tribunal issued their Award in the matter to the tune of GHC197,401,874.00 in favour of Bankswitch Ghana Limited and against the Government of Ghana. (Please find enclosed a copy of the Arbitration Award). Kindly note that Value Added Tax (VAT) and National Health Insurance Levy (NHIL) in the amount of GHC34,545,327.95 is payable on the Award. (Please find attached an invoice for the total sum of GHC231,947,201.95). Furthermore, interest, calculated at the annual average interest reat of all Ghanaian commercial banks (paragraph 11.207 of the Award), is payable on the Award from 12th April, 2014 until date of final payment, as well as VAT and NHIL on any interest accrued. We are instructed by our client to demand, and we hereby demand, the immediate payment of a total sum of GHC231,947,201.95, as well as interest accrued on the GHC197,401,874 at the annual average interest rate of all Ghanaian commercial banks, from 12th April, 2014 to date of final payment, and VAT and NHIL on the interest amount. Yours faithfully,
Bentsi-Enchill, Letsa & Ankomah